Business & Economy

Ello entrepreneur committed to Vermont

Ello screen shot

Paul Budnitz, the founder of the social media phenomenon Ello, says he will expand the company in Vermont, and he says that with the right branding the state could see more and more stories like his popping up in national headlines.

Vermont has the potential to emerge as a technology startup mecca, Budnitz says, citing a high standard of living, an educated workforce, and a culture of hard work and progressive ideas.

Ello, which differentiates itself as an ad-free social media platform, went viral in late September, acquiring new account requests at a rate of 50,000 signups per hour at its peak. The momentum was catalyzed by the LGBTQ community’s mass exodus from Facebook due to the company’s requirement that users display their legal names.

Facebook has since changed this policy as a direct result of the user exodus, and Budnitz — who is riding a wave of national and international media attention — has found himself leading the way with a social media platform that is not infused with advertisements and geared toward selling user data.

Budnitz emphasizes the strong ties between Ello and Vermont and he compares the state’s lack of billboards with Ello’s ad-free platform. “We’re aiming to be the Vermont of the Internet,” he says. “This is a very idealistic company. I do things that I believe in and that seems to be how businesses are run in this state.”

Budnitz operates Ello in an office he shares with his other venture, Budnitz Bicycles, and he says he cannot envision a future in which Ello relocates out of Vermont to a tech hub like San Francisco or New York. “I have a deep commitment to the state now,” the California native says. “I’ve fallen so in love with it since arriving here that we’re here to stay and we’re here to help build good business communities in Vermont.”

Ello benefits from Burlington’s high standard of living, community spirit, and highly educated work force, he says. Even Ello’s partnership with Shelburne venture capital firm FreshTracks Capital — which led to suspicions that the ad-free promise will eventually be compromised to appease investors — has a quality that is unique to Vermont and distinct from the typical venture capital relationship.

“They’re my neighbors,” he says. “I live around the corner from their office and [FreshTracks Managing Director] Cairn [Cross] rides over on his motorcycle and brings the maple beer and the cider that he made himself and we talk. They only invest in businesses that they feel really enrich the world and they believe in the vision of an ad-free social network.”

Budnitz believes that Vermont suffers from a lack of national awareness pertaining to its assets in the tech world. He has had trouble attracting out-of-state investors in the past, and cites state branding as a potential cause. “Vermont is beautiful and we do make cheese and we do have great maple syrup and beautiful barns and those things need to continue to be protected and loved, but at the same time we have great tech here and we have a lot of startups and a lot of businesses doing great things.”

Budnitz feels Vermont is heading in a more tech-friendly direction with initiatives like the TechJam, education programs at Champlain College and shared tech space in Burlington, but he says the state’s efforts haven’t promoted enough.

“The demographic here is very similar to somewhere like Boulder [Colorado], yet Boulder has pushed its high-tech image and now there is a lot of stuff going on there,” he said. “We actually have more substantial high-tech businesses than Boulder, but we just haven’t marketed ourselves that way.”

Ello has a staff of five full-time workers in its Vermont office — in addition to out-of-state developers — and Budnitz anticipates hiring between 20 and 50 more Vermonters in the coming year. The joint Ello/Budnitz Bicycles headquarters will soon relocate from its Maple Street location to a larger space on Pine Street.

Despite the growth, Budnitz doesn’t envision Ello expanding on a massive scale. “Even though this has blown up on the Internet, it is a tech company where computers do a lot of the work, so I’m hoping we don’t end up with a gigantic company,” he said.

Budnitz downplays the comparison of Facebook and Ello, insisting that Facebook isn’t a social network but “an advertising platform where the people are the product being sold.” He explains, “We’re not really trying to compete with other networks. We’re building the network that we believe in and the network that we love.”

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Troy Shaheen

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